Saturday, March 21, 2009

New Plan Same as the Old Plan

Geithner's "revised" plan is getting bad reviews, because it's essentially nonresponsive to the actual problem: a bunch of banks made bad bets, and now hold damaged assets. As Krugman puts it, the plan would have worked if all we had was a market jammed up by panicked selling, but it wastes a trillion dollars if the assets are really correctly valued.

VoxEU lays out the way it should be done.

Meanwhile, Corzine gets on board with the Swedish method.

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